Business

Ryanair Fortifies Europe Dominance With Boeing Deal

Shares of Irish discount airline Ryanair Holdings (RYAAY) moved higher on the stock market today after it announced a $15.6 billion order for 175 passenger jets from Boeing. (BA)

Tuesday's order for current generation 737NGs is expected to bolster Ryanair's position as Europe's dominant low-fare passenger airline.

The deal with Boeing, coupled with Ryanair's plans to retire old plans, should boost the airline's fleet to 400 planes from 300 currently. Ryanair expects capacity to grow by 25% to 100 million passengers per year by 2018.

According to news reports, Ryanair likely got a significant discount off of the jets' list prices, although Ryanair executives would not comment on how much of a discount they secured.

Ryanair's stock price rose 2.3% to 41.24 in late morning trade. Shares hit a five-year high of 41.66 on Feb. 7.

Boeing edged higher on the expected news, continuing a run that has seen its shares rise 14% since the beginning of the year despite 87 Dreamliner woes.

The deal couldn't have come at a better time for the Chicago-based aerospace giant. On Monday, Boeing lost one of its fastest-growing customers to a top rival when Indonesia's Lion Air switched to Airbus for a $24 billion order for 234 single-aisle passenger planes.

Ryanair is now one of the few remaining airlines with an all-Boeing fleet.

On a more positive note, Boeing recently won Federal Aviation Administration approval for test flights for its new 787 Dreamliner. That plane has been grounded the last couple of months due to malfunctioning batteries.

Last week the FAA approved Boeing's plan for testing a new battery system for the plane.